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I love to be right as much as the next guy… but sometimes it's no fun.
Since the end of August – weeks now – I've been pounding the volatility drum as October got closer and closer.
That was the topic on the table this week, when I sat in with Suzanne Sena for a Fast Profits video trade.
We focused our discussion on the seasonal volatility that's as closely associated with this time of year as yellow leaves and jack-o'-lanterns. (If you haven't seen this Fast Profits, you can click here to watch it at any time… and e-mail to thank me when your stake doubles.)
Anyway, the CBOE Volatility Index (VIX) was sitting just below 16 while Suzanne was interviewing me. During that chat, I pointed out that a break above 16 would swing the market into selling mode and subsequently shoot the VIX toward readings around 20, where we would likely see a break in the selling.
And that's more or less exactly what we saw as markets try, with mixed results, to pare their losses as I write this.
We're moving into a period where keeping an eye on the rearview mirror will give us vital intel for going forward…
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Strikepoint Trader and contributes to Money Morning as the Quant Analysis Specialist.